Housing supply regulation

I, the Hon Jim Chalmers MP, Treasurer, pursuant to Parts 2 and 3 of the Productivity Commission Act 1998, hereby request that the Productivity Commission ("the Commission") undertake an inquiry into the rules and regulations that impact housing supply. I ask that the Commission develop actionable recommendations to lift productivity and help Australia build more homes.

Background

Australia has a housing shortage. We do not have enough homes, where people need them, at prices they can afford. Regulation serves an important purpose, but over the past several decades, the volume and complexity of regulations affecting the housing sector have increased significantly.

The Commission’s Creating a more dynamic and resilient economy inquiry report estimates that regulation adds significant cost to the average new house or unit. While many regulations are critical to safety and quality, there is scope to reduce the regulatory burden, without compromising important standards.

Following the Economic Reform Roundtable in August 2025, the Government announced new actions to cut through regulations holding up new homes. This included pausing and streamlining the National Construction Code and to fast-track housing environmental approvals. The 2026-27 Budget built on this, by requiring states and territories to sign up to new reforms that fast track housing approvals, release more housing ready land, and support a genuinely national construction code in exchange for access to the new $2 billion Local Infrastructure Fund. 

To support the Government’s ambitious $47 billion housing agenda and further reduce the regulatory burden on housing supply, the Government is now tasking the Commission to conduct an inquiry into housing supply regulations.

Scope of the inquiry

The Commission will conduct an inquiry to assess how regulatory systems affect housing supply across jurisdictions, identify best practice and recommend reforms to get more homes built quickly across the following matters:

1. Approval processes (e.g., development, building, and post-approvals, including any barriers to the uptake of more productive methods of construction)
2. Availability and use of land for housing (e.g., land release, land use controls)
3. Processes and frameworks to deliver new and utilise existing housing infrastructure (e.g., growth infrastructure planning, developer contributions model)

The inquiry should identify examples of the existing housing regulatory system across jurisdictions that have the greatest impact on housing supply, housing affordability and construction productivity. However, this should also consider the benefits of the regulations and their objectives. 

The inquiry should also evaluate regulatory systems across jurisdictions against established best practice, with reference to existing reform efforts underway. The Commission’s advice should clearly identify reform opportunities, including, where possible, quantitative analysis of the economic benefits of the recommended reforms.  

The interim report should identify regulations that most affect housing and include a prioritised list of reforms to support faster and simpler approvals and make more land available and ready to build more homes. 

The final report should also include an assessment of how advanced states and territories are in their reform efforts, against the features of a best practice system, and assess the expected impact on housing supply of planning and other relevant regulatory reforms taken by states and territories since 1 July 2024. The final report should also quantify, where possible, the economic benefits of the recommended reforms, and provide further advice on reform implementation. 

The Commission should have regard to the Government’s housing agenda and existing reform directions. This includes the National Housing Accord, which has set an aspirational target of building 1.2 million new, well-located homes over five years. The Commission should also take into account other current and recent reforms or reviews of relevance, the recently passed reforms to the Environment Protection and Biodiversity Conservation Act 1999 and the measures and actions agreed to and progressed under the National Planning Reform Blueprint. 

The National Construction Code is considered out of scope for this inquiry, as it is being separately considered as part of a streamlining and modernisation effort, announced following the Federal Government’s Economic Reform Roundtable.  

Process

The Commission should undertake appropriate public consultation, including inviting public submissions. The Commission should engage actively with the Commonwealth, state and territory governments as well as other industry experts.

The Commission should publish an interim report by the end of July 2026. The final report is to be provided to Government by the end of March 2027.

The Hon Jim Chalmers MP
Treasurer

[Received 28 May 2026]